Taxation and Customs Union

Tax administration and tax compliance

What is the job of a tax administration and how is it done?

The task of a tax administration is to collect all tax revenues due in a fair and efficient way with limited costs for taxpayers and the tax administration itself. Therefore, a tax administration needs (1) to ensure that taxpayers comply with the rules and (2) adequate resources (well trained staff, IT, budget).

How does a tax administration know that it is fit for the job?

Several tools are available for tax administrations to evaluate their performance, for instance the EU Fiscal Blueprints and the Tax Administration Diagnostic Assessment Tool (TADAT).  The results of these evaluations show where a tax administration has to take action and improve its performance.

Does a tax administration have to do the reform on its own?

There is no need to reinvent the wheel. Within the EU tax administrations there is a lot of knowledge and experience. Sharing good practices, joining forces and working closely together have proven to be efficient and effective ways of making tax administrations stronger.

What is the role of the European Commission?

The Commission supports the exchange of information and sharing of knowledge and experiences. It even provides targeted hands-on technical assistance. The Fiscalis Programme is especially designed to facilitate and finance these activities for tax administrations.

What else needs to be done?

Even more important is to make sure that everybody pays his share of taxes. Some taxpayers contribute voluntarily, others need help to comply with the tax rules and for some taxpayers strong enforcement measures are required to make them pay. For each type of taxpayer a tax administration has to have a targeted approach, a so-called tax compliance strategy that ranges from providing services and assistance to enforcement measures.